NOTE 11. STOCK PLANS

2018 Performance-Based Stock Incentive Plan

In June 2018, the Company’s stockholders approved the Company’s 2018 Performance-Based Stock Incentive Plan (the “2018 Plan”), and approved grants of performance-based nonstatutory stock options (each, a “Performance Option”) to the Company’s Chief Executive Officer (the “CEO Award”) and President (the “President Award”), under the 2018 Plan. In May 2018, the CEO Award and the President Award had been approved by a special committee of the Board of Directors of the Company (the “Special Committee”), and the 2018 Plan had been approved by the Company’s Board of Directors, subject to stockholder approval.

The 2018 Plan allows the Company to grant Performance Options to its executive officers and other employees as an incentive for them to remain in service with the Company and to further align their interests with the interests of the Company’s stockholders. A total of 4,200,000 shares of the Company’s common stock have been authorized for issuance under the 2018 Plan. The numbers of shares underlying the CEO Award and the President Award are 1,809,900 and 1,357,425, respectively.

All Performance Options granted under the 2018 Plan will become exercisable in three equal tranches based on the achievement of specific market price goals for the Company’s common stock. For each tranche to become exercisable, the closing price per share of the Company’s common stock must meet or exceed the applicable stock price goal for a period of 30 consecutive trading days; this is referred to below as the Attainment Date. The exercise price of each of the CEO Award and the President Award is $21.25 per share, which was the closing market price of the Company’s common stock on the Nasdaq Global Market on May 4, 2018, the last trading day prior to the date on which the Special Committee approved such awards (which was not a trading day). Each Performance Option will have a term of ten years following the grant date, subject to earlier termination in the case of cessation of the awardee’s continued service with the Company, as further described in the 2018 Plan.

The Company valued the CEO Award and the President Award using a Monte Carlo simulation model. The grant date of such awards for accounting purposes was June 29, 2018, the date that was such awards were approved by the Company’s stockholders. The following assumptions were used in the Monte Carlo simulation model for computing the grant date fair values of the CEO Award and the President Award:

The fair value per share was determined for each of the three equal tranches of each award and is presented in the table below:

The total fair value of such awards is $30,375 and is being recorded as stock-based compensation expense over the derived service periods.

At September 30, 2018, the Company had stock-based awards outstanding under the following plans: the 2014 Stock Option/Stock Issuance Plan (the “2014 Plan”), the 2017 Stock Incentive Plan (the “2017 Plan”) and the 2018 Plan. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for a summary of the 2014 Plan and 2017 Plan. There have been no material changes to the terms of the Company’s 2014 Plan and 2017 Plan during the nine months ended September 30, 2018.

Stock-Based Compensation

The Company’s stock-based compensation expense recognized for the periods presented was as follows:

Restricted Stock

The Company’s restricted stock activity for the nine months ended September 30, 2018 was as follows:

At September 30, 2018, total unrecognized compensation cost related to restricted stock was $533, which is expected to be recognized over a weighted average period of 1.7 years.

Restricted Stock Units

The Company’s restricted stock unit activity for the nine months ended September 30, 2018 was as follows:

As of September 30, 2018, total unrecognized compensation cost related to restricted stock units was $435, which is expected to be recognized over a weighted average period of 0.8 years.

Performance-Based Stock Options

The activity related to performance-based stock options granted under the Company’s 2018 Plan for the nine months ended September 30, 2018 was as follows:

The weighted average grant date fair value of performance-based stock options granted under the 2018 Plan during the nine months ended September 30, 2018 was $9.59 per share. No performance-based stock options vested during the nine months ended September 30, 2018. At September 30, 2018, total unrecognized compensation expense related to performance-based stock options was $28,434 and is expected to be recognized over a weighted average period of 4.1 years.

Stock Options

The activity related to stock options granted under the Company’s 2014 Plan and 2017 Plan for the nine months ended September 30, 2018 was as follows:

The aggregate intrinsic values in the table above represents the difference between the fair market value of the Company’s common stock and the average option exercise price of in-the-money options multiplied by the number of such options. The weighted average grant date fair value of stock options granted during the nine months ended September 30, 2018 and 2017 was $7.90 and $8.72 per share, respectively. The aggregate intrinsic value of the options exercised during the nine months ended September 30, 2018 and 2017 was $1,964 and $32, respectively. The total grant date fair value of stock options vested during the nine months ended September 30, 2018 and 2017 was $6,711 and $11,451, respectively. At September 30, 2018, total unrecognized compensation expense related to stock options was $20,831 and is expected to be recognized over a weighted average period of 2.5 years.

Employee Stock Purchase Plan

On July 31, 2018, a total of 44,842 shares of common stock were purchased under the Company’s Employee Stock Purchase Plan. As of September 30, 2018, accrued employee contributions for future purchases under the Employee Stock Purchase Plan totaled $200.